From the Desk of Bill Vanderspek
Update: A-163 Allocation and allotments to growers.
As communicated to industry on April 7, 2020, BC hatcheries reduced egg sets by 5% effective April 6, 2020 to respond to changes in the market as a result of COVID-19. To achieve an allocation reduction of 7.5% from the February 5th allocation, as set by the CFC Board on April 14, 2020, BC hatcheries reduced egg sets by 10% effective April 13, 2020 and by 15% effective April 20, 2020 for the remainder of A-163.
The reconsideration and reset of the A-163 allocation on April 14, required that the BCCMB office recalculate allotments to growers based on the new domestic number. Revised Quota Production Allotments (QPA’s) were issued to all mainstream chicken growers showing a reduction of 7.5% from the original QPA’s that were issued in February. On April 14 when the A-163 allocation was revised, hatcheries had already set eggs for the first four weeks of the period.
As a result, egg sets for period A-163 based on the original allocation of 2.5% over base set on February 5, followed this trend:
• Weeks 1, 2, and 3 at 100%
• Week 4 was set at 95%
• Week 5 at 90%
• Weeks 6, 7, and 8 at 85%
Depending on which home week a grower places and ships, performance for A-163 could end up: (beyond the original A-163 allocation set on February 5, 2020)
• Weeks 1, 2 and 3, growers could be overproduced by 7.5%
• Week 4 growers could be overproduced by 2.5%
• Week 5 growers could be underproduced by 2.5%
• Week 6, 7 and 8 growers could be underproduced by 7.5%
These projections will be complicated by a number of factors:
• The weekly over and under percentages are based on growers targeting their production based on 100% of their allotments. Actual results could result in much higher over or under production numbers for growers based on their final numbers.
• Some growers such as roaster and organic chicken producers will have placed well before week 1 and could be shipping much later in the period.
• A number of growers were held out for several days beyond their original shipping dates in order to facilitate the schedule changes required to accommodate the Superior and United processing plant disruptions.
It will be a number of weeks before period A-163 is complete and the final results are tallied, but a commitment was made to the industry that a plan would be presented before the end of the period.
In order to provide a solution that will provide equal opportunity to all growers, the Board has approved the following measures for period A-163 only.
1. All production in excess of 100% of a grower’s revised allotment will be carried forward and deducted in period A-169, but no monetary penalties will be levied for the period.
2. The underproduction sleeve will be increased from 6% to 13.5% for period A-163 only.
3. Underproduction from A-163 will be carried forward to period A-169; growers with insufficient space to grow their entire allotment will be permitted to lease out the excess for this period only. No carry forward of underproduction beyond period A-169 will be permitted. BCCMB production staff will involve hatchery and procurement personnel in the process of ensuring that growers with insufficient space are matched with growers that have extra space to ensure that the entire allocation is produced and no grower has unused allotment.